The operator of a pipeline that wants to shut out Philadelphia refiners from the Pittsburgh market says that cross-state fuel deliveries have plunged by more than two-thirds since 2014, justifying its proposal to halt the pipeline’s westbound flow in central Pennsylvania.
Buckeye Partners LP released data on Tuesday depicting a dramatic decline in traffic on its Laurel pipeline ahead of two scheduled hearings on its proposal to partly reverse the pipeline’s flow, effectively cutting Philadelphia refiners off from Western Pennsylvania.
Buckeye said fuel deliveries on its pipeline from Philadelphia to Pittsburgh declined from more than 90,000 barrels per day in 2014 to under 30,000 barrels per day in 2017, underscoring a fundamental shift in fuel markets as Midwestern refiners expand into the Pittsburgh market. Buckeye wants to repurpose part of the 350-mile Laurel pipeline to give Midwestern refiners more access to Western Pennsylvania.
A Pennsylvania Public Utility Commission administrative law judge held the first of two hearings Tuesday in Harrisburg to hear public testimony on Buckeye’s proposal, which would halt westbound fuel deliveries at Altoona. The company wants to reverse the flow on the remaining portion of the pipeline to carry fuel from Pittsburgh to Altoona.
Buckeye’s filing has drawn flak from two Philadelphia-area refiners, Philadelphia Energy Solutions and Monroe Energy, which say they will be harmed by the reduction in market access. Several Pittsburgh fuel retailers, including the Sheetz convenience-store chain and Giant Eagle grocery, have also protested, saying the loss of a major supply source from the East will reduce competition and potentially increase prices.
But Midwestern refiners, led by Marathon Petroleum Co. of Findlay, Ohio, say they are eager to move more fuel into Western Pennsylvania, which they say is more competitively priced than East Coast products. They argue that the pipeline reversal would not harm Philadelphia refiners, would make the region less dependent upon foreign-refined products, and would increase supply choices in central Pennsylvania.
About two dozen people testified Tuesday before Administrative Law Judge Eranda Vero on Buckeye’s proposal. Several said they feared the refineries in Philadelphia would ultimately be the losers.
“When we have Pennsylvania refineries, why would we want to ship product in from the Midwest?” said Anthony Gallagher, the business manager of Steamfitters Union Local 420 in Aston. He said pipeline reversal could imperil the jobs of his members who work at the refineries.
But Abe Amoros, the Pennsylvania legislative director of the Laborers’ International Union, said his members supported the proposal because of employment opportunities from the proposed $200 million in upgrades Buckeye promised to make to reverse the pipeline flow.